Aug. 5, 2014
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On the floor of the New York Stock Exchange. / Richard Drew, AP

by Paul Davidson, USA TODAY

by Paul Davidson, USA TODAY

Stocks fell sharply Tuesday as global tensions continue to outweigh growing evidence the U.S. economy is picking up steam.

The market had been lower all day and losses accelerated in afternoon trading as traders pointed to news reports of a buildup in Russian troops on the Ukraine border and comments from a Polish politician that said Russia is poised to invade or pressure militarily Ukraine's eastern border.

The big drop in stocks comes despite upbeat economic news. And correction talk persists on Wall Street as the hoped-for stock market rebound hit a wall again after Monday's gains.

U.S. service companies expanded last month at the fastest pace in more than six years, suggesting that strong economic growth is continuing in the current quarter.

A closely watched index of the service sector rose to 58.7 from 56 in June, the Institute for Supply Management said Tuesday. A reading above 50 indicates expansion. Economists expected 56.5.

More good news: Factory orders rebounded in June, rising 1.1% from the previous month, reaching the highest level since 1992, the Census Bureau reported Tuesday.

European markets rose as the DAX of Germany gained 0.4% to settle at 9189.74. That is still well below the 10,000 threshold it crossed for the first time at the June 9 close and last surpassed on the July 4 close.

In France the CAC 40 rose a similar percentage to end the day at 4232.88. Britain's FTSE managed an 0.1% gain to 6682.48.

Investor sentiment in Asia was dampened by a downbeat reading of China's services industries, which grew at the slowest rate last month since November 2005. Japan's Nikkei 225 index retreated 1% to 15,320.31.

U.S. stocks rose Monday and recovered some of last week's steep losses.